Acomo increased net profit to € 17.4 million for H1 2017

20 Jul 2017 18:13 CEST

Half year interim dividend set at € 0.40 per share, equal to H1 2016

Main financial indicators H1 2017

• Net profit: € 17.4 million (H1 2016: € 17.2 million, +1%)
• Sales: € 354.2 million (H1 2016: € 341.8 million, +4%)
• EBITDA: € 28.4 million (H1 2016: € 28.2 million, +1%)
• Earnings per share: € 0.714 (H1 2016: € 0.718, -1%)
• Interim dividend: € 0.40 per share (H1 2016: € 0.40, equal)
• Solvency: 53.4% (H1 2016: 49.6%)

Highlights and developments H1 2017

• - Performance in the first six months improved in three out of four segments versus prior year. Both Spices & Nuts and Tea realized higher sales at stable margins. Food Ingredients achieved stable sales at higher margins. Edible Seeds reported higher sales at lower margins.
• - Food commodity prices were very volatile with major price swings upward in nuts, and downward in spices. Edible seed prices declined resulting in pressure on maintaining absolute margins. Tea prices remained at higher than expected levels in Sri Lanka and Africa.
• - On 25 January 2017, the Group’s working capital bank facilities were extended for another three years with the option for two additional years, at improved terms.
• - On 5 May 2017 the acquisition of nuts trader Delinuts, based in Ede, the Netherlands, was completed. Delinuts offers a wide range of nuts and dried fruits to wholesale and retail customers, the food industry and the out-of-home channel. Acomo’s new subsidiary complements the existing activities of group companies in nuts and dried fruits.

Over the first six months of 2017, the consolidated sales recorded by Amsterdam Commodities N.V. (Acomo) increased by 4% to € 354.2 million (H1 2016: € 341.8 million), partly caused by the consolidation of Delinuts (€ 10.8 million). The total gross margin increased by 7% due to Delinuts, and a higher share of value-added products (e.g. SunButter^®). Personnel and general costs increased due to Delinuts, and increased processing costs in the US.

The interest expenses decreased due to lower average borrowings, partly offset by higher Libor rates. The effective corporate income tax rate decreased by 0.9 percent point due to a more favourable country mix of the Group’s source of profits. H1 2017 net profit of € 17.4 million is 1% above the first half of 2016.

Currency euro/US dollar

The US dollar remained relatively stable at higher levels compared to H1 2016 versus the euro in the first four months of 2017, but weakened in the last two months. The average euro/US dollar exchange rate of 1.083 in H1 2017 was stronger than H1 2016 (1.117). The FX rate had no material impact on sales and net profit.

The US dollar declined versus the euro at the end of this half year period. The euro/US dollar balance sheet exchange rate on 30 June 2017 was 1.143 versus 1.052 on 31 December 2016. The impact of the FX rate on the consolidated assets was € 12.1 million.

Interim dividend H1 2017

The interim dividend per share is set at € 0.40 in cash, in line with H1 2016. The dividend is payable on 4 August 2017 (ex-dividend date is 25 July 2017).

Key figures H1 2017 – unaudited

[see attached]

‘It is satisfying to see that the efforts of our operating companies have resulted in a solid performance in the first half of 2017. Our people have done very well in addressing the challenging market circumstances  and their continued search for market opportunities. I am very happy to welcome the Delinuts employees to the Acomo Group and I am confident that Delinuts will develop further within our Group,’ said Group Managing Director Allard Goldschmeding.

Activity review per segment

Spices and Nuts

Catz International in Rotterdam, the Netherlands, realized a net result which was only slightly below the record year 2016. This is an excellent achievement given the challenging market circumstances in which prices of a number of spices halved. Pepper showed a significant downward price trend and so did products like garlic and dried fruits. Cashews prices on the other hand increased by double digits.  

Tovano in Maasdijk, the Netherlands, achieved an excellent result, benefiting from good market conditions.

King Nuts & Raaphorst in Bodegraven, the Netherlands, achieved strong margins and an excellent net result. Most nut prices showed an upward trend in the first six months. Brazil nuts in particular experienced a price explosion, due to reduced crops as a consequence of drought in the Amazon region. King Nuts & Raaphorst did an excellent job in handling these market conditions.

Delinuts in Ede, the Netherlands, joined the Acomo Group per 5 May 2017, and performed in May and June ahead of the same months prior year. Delinuts was consolidated per 1 May 2017 and contributed positively to the Group’s net profit.

Edible Seeds

Red River Commodities in Fargo, USA, realized net profit results at the level of H1 2016. A warm and short winter impacted bird food sales in the USA market. Despite lower volumes, Red River Commodities maintained its bird food gross margin. Export sales were lower due to a strong US dollar, world competition and overall low commodity prices. Lower sales to the snack market were compensated by an excellent six months for SunButter^® with sales and margin growth well above 20%. Startup company Red River Global Ingredients in Winkler, Canada, began trading activities late in 2016 with a focus on specialty grains and pulses. H1 2017 was in line with company expectations.

Red River-van Eck in Zevenbergen, the Netherlands, experienced a difficult poppy seed market the past six months due to very soft market conditions. The net result was substantially below prior year.

SIGCO Warenhandel in Hamburg, Germany, showed improved financial results versus prior year, due to better margins on bakery seeds at stable turnover.

Tea

Van Rees Group in Rotterdam, the Netherlands, realized an improved net result in the first six months versus prior year. Volumes were up in most offices, except for Colombo, Sri Lanka. The Colombo office was impacted by persistent high prices for Sri Lankan teas in the first six months and reduced volumes to Turkey. Margins were similar to last year levels. Crops in Kenya were down significantly by about 50,000 MT versus last year, which caused higher selling prices in the entire East African region. General demand was good although some countries, such as Russia and Egypt showed lower demand due to economic circumstances.

Food Ingredients

Distribution and blending activities in Food Ingredients continued to perform excellent. The net result for the first six months improved further versus prior year. Both dry and wet blends volumes grew, resulting in higher margins at stable costs.

Consolidated balance sheet and financial position

The Group’s total balance sheet shortened when compared with 31 December 2016 mainly because of lower inventories (decrease of € 9.9 million) and lower trade creditors (decrease of € 9.3 million). The addition due to the consolidation of the assets of Delinuts was more than offset by reduced stock levels and the euro/US dollar exchange rate per 30 June 2017.

Shareholders’ equity increased by € 2.0 million to € 184.9 million on 30 June 2017 (31 December 2016: € 182.9 million). In May 2017, the 2016 final dividend of € 18.2 million was paid (€ 0.75 per share).

Long-term bank borrowings increased by € 7.6 million and short-term borrowings were reduced by € 5.2 million versus year-end 2016.

Outlook 2017

2017 started in line with the first half of 2016. Given the nature of the Group’s activities, it is impossible to forecast market developments or likely Group results. However, the Company is confident that its teams will continue to generate good results for shareholders.

Responsibility statement of the Executive Board as per section 5:25c (2) (c) of the Dutch Financial Supervision Act (Wft)

The Company’s executive director hereby declares that, to the best of his knowledge:

1. The half year report for the first six months of 2017 gives a true and fair view of the assets, liabilities, financial position and the profit of the Company and its consolidated entities.
2. The half year report for the first six months of 2017 gives a true and fair view of the financial position of the company at the balance sheet date and of their state of affairs during the first H1 2017 of the Company and its related entities whose financial information has been consolidated in the half year report.                   

Rotterdam, 20 July 2017

Allard Goldschmeding                     

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